Judge Rules ApeCoin and BAYC NFTs Are Not Securities, Marking Legal Victory for NFT Sector

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Wednesday, October 8, 2025 at 10:51 AM
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In a landmark decision for the NFT industry, U.S. District Judge Fernando M. Olguin has ruled that ApeCoin (APE) and Bored Ape Yacht Club (BAYC) NFTs do not qualify as securities, leading to the dismissal of a high-profile lawsuit against Yuga Labs, the creator of the assets.

Key Takeaways:

  • Lawsuit against Yuga Labs dismissed.

  • ApeCoin and BAYC NFTs ruled non-securities under the Howey Test.

  • Legal clarity for NFT creators and digital asset developers.

  • Decision may reduce SEC scrutiny on utility-based NFT projects.

  • Increased investor and developer confidence in the NFT space.

The ruling focused on the lack of a “common enterprise”, a critical component of the Howey Test, which determines whether an asset qualifies as a security under U.S. law. Judge Olguin stated that “statements about NFT prices and trade volumes are not enough to establish an expectation of profit,” a cornerstone requirement for security classification.

This verdict marks a major legal milestone for the broader NFT and digital collectibles ecosystem, potentially setting a precedent for future regulatory interpretations. By confirming that these assets fall outside securities law, the ruling may limit SEC jurisdiction over similar NFT projects that emphasize community utility, digital ownership, and cultural value over investment returns.

For Yuga Labs, the dismissal of the case reinforces its position as a leader in the NFT space and could embolden other creators to continue developing consumer-facing NFT experiences with less fear of regulatory pushback.

Legal experts and industry analysts suggest that this decision could influence upcoming policy discussions and shape future NFT-related litigation. By drawing a clearer line between investment vehicles and utility-focused digital assets, the court provides a more defined regulatory pathway for developers, investors, and marketplaces.

The NFT sector is expected to see renewed confidence and innovation, as this ruling offers a protective legal framework for creators operating within the bounds of consumer utility and artistic expression.